Addressing risk is critical to the survival of family farms. Each year, farmers must rise to meet the inevitable challenges of poor weather, market volatility, and natural disasters. Better risk management can save farms and help changing rural economies thrive.
Online Risk Management Resources for Farms:
- The RAFI Guide to WFRP and NAP Cost Estimators – NEW!
- Review of 2016 WFRP and NAP Risk Management Program – NEW!
- Overview of Major Types of Risk Management Strategies
- About the new WFRP Policy
- New Whole Farm Revenue Protection (WFRP) Policy Webinar
USDA Resources for Farms:
- 2016 WFRP Fact Sheet – NEW!
- 2016 NAP Fact Sheet – NEW!
- 2016 NAP Fact Sheet (Español) – NEW!
- Crop Insurance for Organic Production – NEW!
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Risk Management is Crucial for Sustainable Agriculture to Thrive
Sustainable farming has limited access to risk management and lending programs because the world of risk is based on actuarial analysis rather than field research on agricultural production practices. Based on actuarial analysis alone, to a banker, 1,000 acres of mono-crop corn is a much safer investment than a diversified, mixed crop and livestock operation. This is because the banker does not take into account the benefit or value of employing agricultural production methods that have been proven to mitigate risk. Yet, many innovative sustainable farmers and researchers have tested and confirmed the risk mitigation value and multiple benefits associated with diversification, integrated production, soil quality and conservation, and a host of sustainable practices.
What RAFI Does to Support Better Risk Management Policies & Practices
Each year, farmers must rise to meet the inevitable challenges of poor weather, market volatility, and natural disasters. RAFI supports farmers in developing and accessing better risk management practices through three key areas: advocacy, research, and policy development.
We do this work not only because crop insurance can help farmers survive severe weather and manage risk but because it can also pave the way to other risk management tools, most notably agricultural credit. Historically crop insurance has best served commodity growers in the Midwest, but we work to ensure that it serves a diverse set of farmers including commodity growers but also specialty, organic, direct market, and diversified farmers.Farmers, particularly those who employ sustainable agricultural production methods, are often not eligible for risk management and lending programs.
Our work in risk management is designed to address these challenges:
- The limited availability of adequate risk management products and lending programs puts diversified farmers at a disadvantage and has huge implications for beginning farmer entry, the ability of sustainable food production to grow beyond current limitations, and the resiliency of agriculture as a whole.
- Continued reliance on crop insurance without production-based risk management shifts risk management from prevention to remediation— essentially encouraging risk decisions that increase rather than decrease susceptibility to climate change over time.
Our work is focused on researching, promoting and developing risk management models that will reward, and not penalize, farmers for practicing sustainable, production-based risk management. Research and advocacy efforts are informed by our experience working directly with farmers and stakeholder. We also develop resources about risk management and offer risk management education for farmers.
Current Projects & Initiatives
RAFI is looking intensively at the risk implications of sustainable farming practices, focusing on access to risk management for beginning farmers. The goal of this work is to incentivize sustainable, production-based risk management in crop insurance and lending practices, thereby reducing the risk of moral hazard and opening sustainable agriculture to new risk management options.
Crop Insurance Development
RAFI is working with the North Carolina Strawberry Association to develop a crop insurance policy for strawberries in North Carolina. Strawberries are particularly risky because of the upfront investment and the amount of time crops spend in the field before harvest. Strawberries are not currently covered by a single crop policy in North Carolina, which limits risk management and credit options for strawberry growers.
Risk Management Education
RAFI’s risk management research suggests that family farmers are not being provided the resources needed to make informed risk management decisions. In a 2012 RAFI survey of 157 specialty crop growers, over 65 percent reported “little or no knowledge of crop insurance.”
Given the importance risk management plays in both income security and access to credit, this information gap must be addressed. RAFI has organized a variety of workshops and events designed to educate farmers on crop insurance and risk management:
RAFI’s “Resource Rodeos“ events brought farmers and resource providers together in an informal setting to discuss financial and legal topics related to farm enterprises. Funded by a generous grant from the Southern Risk Management Education Center (SRMEC), our Resource Rodeos reached farmers and resource providers across NC in 2012 and 2013.
- Resource Rodeo connects farmers with financial aid and legal services in Eastern NC (June 2013)
- Resource Rodeo for Farmers on September 30 & Oct 7, 2103
- Farmer Resource Rodeo Workshop Held at CFSA Conference
Resourceful Farmer Workshop (June 2015) Do you have a plan for managing risk on your farm? Join RAFI staff members in discussing crucial farm risk management issues and develop a plan for better addressing risk on your farm.
- Fact Sheets, “Revised & Updated: The Farmer’s Guide to Agricultural Credit”
- “Revised & Updated: The Farmer’s Guide to Agricultural Credit”
- “Managing Specialty Crop Risk in North Carolina” Report, 2013
- “Disaster Programs and the Changing Face of Agriculture in North Carolina”, 2007
- RAFI Testimony to the House Agriculture Committee, 2007
- “The Farmer’s Guide to Agricultural Credit”
- “The Farmer’s Guide to the Development of New Farm Enterprises”
Recent Articles on Crop Insurance from the RAFI Blog:
- Farmers, Apply for Crop Insurance by Feb 28th! (2/17/2017) - Deadlines are quickly approaching for 2017 specialty crop insurance coverage. Make sure you have all the resources you need to be eligible by Feb 28th!
- Hurricane Matthew: Disaster Assistance for Farms (10/6/2016) - As Hurricane Matthew bears down on the coast of Florida and the Southeastern US, our thoughts are to everyone bracing for the storm. Here are some important disaster assistance resources that farmers should familiarize themselves with as soon as possible.
- Fact sheet: Crop Insurance for Organic Farming Practices (3/6/2016) - Organic farming has become one of the fastest growing segments of U.S. agriculture. USDA’s Risk Management Agency (RMA) recognizes organic farming practices as good farming practices and continues to move forward in improving crop insurance coverage for organic producers and producers transitioning to organic production to make viable and effective risk management options available. In general, regulations governing the insurability of organic and transitional practices are the same as for conventional practices.
- Historic Changes to Whole Farm Revenue Protection (8/27/2015) - Farmers interested in signing up for WFRP will have the opportunity beginning September 1, 2015.
- RMA Announces Historic Crop Insurance Reforms to Whole Farm Revenue Protection (8/27/2015) - Today the Risk Management Agency of the USDA announced major changes to Whole Farm Revenue Protection (WFRP), including expanded access to beginning farmers and making the policy available in every state and county in the country. These changes will be effective starting in the 2016 crop year.
- RAFI Producer Survey on Whole Farm Revenue Protection (7/1/2015) - Executive Summary RAFI, along with the National Sustainable Agriculture Coalition, National Center for Appropriate Technology, Farm Credit Council, and North Carolina Cooperative Extension, distributed a survey to farmers in effort to collect information about their knowledge of and experience with Whole Farm Revenue Protection (WFRP) during the first sales period for the policy. The survey […]
- Should Crop Insurance Be Part of Your Farm Risk Management Plan? (6/16/2015) - RAFI and Appalachian Sustainable Agriculture Project (ASAP) have just released the first recording of a series of online webinars designed to help you manage risk on your farm. Click on the link below to view the first recorded session: Should Crop Insurance Be Part of Your Farm Risk Management Plan? crop insurance webinar.wmv For follow-up […]
- A Whole Year of Whole Farm – The (Preliminary) Data is in! (5/7/2015) - Last year 838 AGR and AGR-Lite policies were sold in the US. Thus far 1,120 WFRP policies have been sold in 2015 - an increase of 282 policies, or 34%, over AGR and AGR-Lite combined.
- Whole-Farm Revenue Protection (WFRP)
- Risk Management Strategies
- Infographic: The Long & Winding Road to Crop Insurance Reform